Europe open: Shares rally after tough week, but Zalando out of fashion

European shares rallied at the open on Friday after another week of sell-offs with investors hunting for bargains, although German fashion retailer Zalando slumped after downgrading its outlook.

The pan-European Stoxx 600 index rose 0.6% in early deals, with most major bourses higher. Britain's FTSE 100 was up despite the government losing two by-elections by huge margins, increasing the pressure on Prime Minister Boris Johnson, whose popularity is now ebbing among voters.

Only Germany’s DAX was lower in a day short on major corporate news.

“Fluctuating sentiment is again in evidence, with investors reacting with some temporary relief to the absence of any new concerns,” said Interactive Investor head of markets Richard Hunter.

“Indeed, US markets are on course to finish the shortened trading week marginally ahead, although the progress does little to stem the damage already done so far this year.”

In equity news, Zalando plunged more than 16% to a more than three-year low after it lowered its 2022 outlook, citing deteriorating macro conditions and consumer confidence.

Italy's Saipem fell after the energy services group said it would have financial resources available for less than one year if its plans to raise capital did not go through.

Shares in UK bank Barclays made slight gains after the company said it had struck a deal to acquire specialist lender Kensington Mortgage Company.